Yanghe(SZ:002304) Tai Ping Yang·2024-04-30 04:09Investment Rating - The report assigns a rating of "Accumulate" to the company with a target price of 106.80, compared to the last closing price of 100.09 [1][3]. Core Views - The company has achieved a record high dividend payout ratio of 70% in 2023, indicating strong cash flow and shareholder returns [3]. - The company is currently in an adjustment phase, with notable growth in low-end liquor products, while overall performance in Q4 2023 was below expectations [3]. - The company aims for a revenue growth of 5%-10% in 2024, focusing on deepening its market presence and enhancing operational efficiency [3]. Financial Performance Summary - In 2023, the company reported revenue of 33.126 billion, a year-on-year increase of 10.04%, and a net profit of 10.016 billion, up 6.80% [3][5]. - For Q1 2024, revenue reached 16.255 billion, reflecting an 8.03% year-on-year growth, with a net profit of 6.055 billion, up 5.02% [3]. - The company’s gross margin for 2023 was 75.25%, with a slight increase in Q1 2024 to 76.03% [3][5]. Product and Market Insights - The company’s mid-to-high-end liquor and regular liquor segments generated revenues of 28.539 billion and 3.950 billion respectively in 2023, with growth rates of 8.82% and 20.70% [3]. - The company has increased the ex-factory price of its M6+ product by 20 yuan per bottle starting April 1, 2024, to support future growth [3]. - The company’s revenue from provincial and non-provincial markets in 2023 was 14.393 billion and 18.096 billion respectively, with non-provincial revenue growing at a faster rate [3]. Expense and Profitability Analysis - Sales expenses increased significantly, leading to a slight pressure on net profit margins, which were 30.25% in 2023 and 37.24% in Q1 2024 [3]. - The company’s advertising and promotional expenses reached 3.461 billion in 2023, a 43.34% increase year-on-year, reflecting intensified competition [3]. - The net profit margin for 2023 was 30.25%, slightly down from the previous year due to increased expenses [3]. Future Projections - The company forecasts revenue growth rates of 9%, 8%, and 7% for 2024, 2025, and 2026 respectively, with net profit growth rates of 7%, 7%, and 6% [3][5]. - The expected earnings per share (EPS) for 2024, 2025, and 2026 are projected to be 7.12, 7.61, and 8.05 respectively [5].